| Loss/relief | BLAGAB I - E | BLAGAB trade | Non-BLAGAB trade | Long Term Business Fixed Capital (LTBFC) and other non-trading business | Short-term business (e.g. general insurance) | |------------|-------------|--------------|------------------|---------------------------------------------------------------------|---------------------------------------------| | Management expenses | Adjusted BLAGAB management expenses are set against I - E income and net chargeable gains of the period. Excess expenses can only be carried forward and treated as BLAGAB expenses of the next period. | X | X | Exceptionally the general rule at CT09/S1219 could apply to expenses from the management of grandfathered assets in LTBFC or other non-trading activity. Expenses are set against income from the non-trading business in the period. Excess expenses can be:

- Set off against total profits of the period (excluding BLAGAB policyholder share of I-E profits)

- surrendered as group relief;

- carried forward and set against | X | | Trade losses | A BLAGAB trade loss (LAM07310) of the period can be: | |--------------|--------------------------------------------------| | | • set sideways against shareholder total profits of the period (i.e. non-BLAGAB trade profit, - profit arising in long-term business fixed capital and any general insurance profit); | | | • set against shareholder total profits for the previous 12 months; | | | • surrendered as group relief; | | | • carried forward and set against any BLAGAB trade profit of the next period. | | | A BLAGAB trade loss utilised under any of the first three options above requires two adjustments to be made: | | | • firstly the loss must be reduced by any BLAGAB non-trading deficit – see S126 FA2012, then; | | | • the BLAGAB management expenses of the period | | Non-BLAGAB trade losses (LAM07300) are treated as “normal” trade losses and can be: | | | • set against shareholder total profits\* of the period, then any remaining losses can be set against shareholder total profits\* of the previous 12 months; | | | • surrendered as group relief; | | | • carried forward and set against future non-BLAGAB profits. | | *Shareholder total profits include: | | | - the shareholders’ share of the I - E profit; | | | - non-BLAGAB trade profit; | | | - profit arising from long-term business fixed capital; | | | - profit from any short-term business. | | LTBFC/non-trading income of the next period. | Losses from any short-term business such as general insurance are treated as “normal” trade losses and can be: | | | • set against shareholder total profits* of the period; | | | • any remaining loss can be set against shareholder total profits of the previous 12 months; | | | • surrendered as group relief; | | | • carried forward and set against future profits of the short-term trade. | | \*Shareholder total profits include: | | | - the shareholders’ share of the I - E profit; | | | - non-BLAGAB trade profit; | | Allowable (capital) losses | BLAGAB allowable (capital) losses (LAM03200) can be utilised as follows: | Allowable losses not arising from BLAGAB will be set off against any chargeable gains not arising from BLAGAB. Any excess allowable losses can be | |---------------------------|--------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------| | | • set against BLAGAB chargeable gains of the period (including deemed gains (LAM03300); | • Set off against any shareholders share of BLAGAB gains, or | | | • carried forward and set against BLAGAB chargeable gains of the next period; | • carried forward to the next period and set against chargeable gains arising not arising from BLAGAB in future periods or shareholder share of any BLAGAB gains in future periods. | | | • the shareholder share of the net BLAGAB allowable loss can be set against non-BLAGAB gains (LAM03420). | | | Allowable loss arising from deemed disposal | A net allowable loss can be carried back (in full or in part) and set against net chargeable gains arising from the deemed | |

- profit arising from long-term business fixed capital;

- profit from any short-term business. | **under S212 TCGA (LAM03340)** | disposal in the previous two accounting periods. Any net allowable loss remaining is spread over 7 years. $\\frac{1}{7}$th of the net allowable loss is treated as an allowable loss of the accounting period with a further $\\frac{1}{7}$th treated as an allowable loss at the end of each succeeding accounting period. | | | | | **Non-trading loan relationship deficit (loan relationships and derivatives)** | Any BLAGAB NTLR deficit (LAM03060) is to be used firstly against BLAGAB income and gains of the period. Any remaining deficit can be carried back for up to 3 accounting periods ending within the 12 months immediately before the deficit period. Any deficit still remaining is carried forward to the next period and treated as a deemed BLAGAB management expenses of that period. | X | X | A NTLR deficit arising in LTBFC is treated as a "normal" non-trading deficit under CTA09/S456. The deficit can be:

- set against shareholder total profits of the period;

- carried back (in full or in part) and set against any NTLR profit(other than BLAGAB NTLR profit) of the previous 12 months; | X | | Non-trading deficit (Intangible assets) | Any non-trading deficit (LAM03070) arising from an intangible asset is treated as a deemed management expenses of the period. When there is no I–E profit the shareholders’ share of any BLAGAB non-trading deficit for the period can be group relieved under CTA10/S99. | | Any non-trading deficit arising in LTBFC is treated as a “normal” non-trading deficit under CTA09/S456. The deficit can be: | | • surrendered as group relief; • carried forward and set against non-trading profits for future accounting periods. | | UK property business loss | An overall net loss arising from BLAGAB property businesses (LAM03900) is treated as a deemed management expense of the period. When there is no I–E profit the shareholders’ share of any BLAGAB UK property business loss for the period can be group relieved under CTA10/S99 | X | X | Any property income loss arising from property assets in LTBFC is set off under the rules in CTA10/S62 PIM4230 | X | | Capital Allowances – investment assets | Investment capital allowances can be deducted in the BLAGAB I - E computation. S545(3) CAA2001 denies relief for investment capital allowances in non-BLAGAB. | X | X | X | X | | Capital Allowances – management assets | Management capital allowances are brought into account at step 3 of S76 FA2012. Management capital allowances can be deducted in the BLAGAB trade computation. Management capital allowances can be deducted in the non-BLAGAB trade computation. S18 & S253 CAA01 allow for capital allowances on plant & machinery used in managing the investment business. The normal capital allowances rules apply to general insurance business. See GIM4030 and CTM02350. | X | X | X | X | | Group relief | The shareholders' share of the I-E profit can be relieved by group relief surrender by other group companies. The shareholder's share of amounts falling within CTA/210 (d)-(g) are not available to surrender as group relief when there is an I-E profit for the period. | X | The normal group relief rules apply to a claim against a non-BLAGAB trade profit. | The normal group relief rules apply to a claim against any profits arising in LTBFC. | The normal group relief rules apply to a claim against any short-term business profit. |